Commentary: Washington Wish ListIf the divided new Congress wants to get something done, it could start with these pragmatic proposals for small business

With congress divided nearly in half and a President picked by the tiniest of margins, it's not likely we'll see sweeping reforms anytime soon. In this regard, small business is as responsible as the rest of the electorate. A national exit poll conducted by The Polling Co. found 47% who identified themselves as small-business owners voted for GOP congressional candidates, vs. 44% for Democrats. The vote among the general electorate was 46% Republican, 45% Democratic.

Can the legislators come together on anything? Who knows? But if they're feeling pragmatic, here's the nonideological wish list for small biz:

Compromise on the estate tax. With surplus projections shrinking fast, an outright repeal of the ''death tax'' seems like a long shot. But Congress can provide relief to entrepreneurs by adopting the Democratic alternative, which would double the current $675,000 per person exemption for all taxpayers. This would allow entrepreneurs to pass along their businesses without leaving heirs a huge tax bill. Some 75% of small-business owners would pay no estate tax at all, and most others would see their tab significantly reduced.

Repeal the installment sales tax. The 1999 Tax Relief Act contained a little-noticed provision requiring taxes on the proceeds of most sales of businesses to be paid all at once, immediately--even if the funds are to be received in installments over several years. Sound obscure? Not to the thousands of entrepreneurs who have had to postpone selling their companies because they lack the cash to pay the taxman. Legislation is on the table to let businesses with receipts of less than $5 million use the old pay-as-you-go method of accounting. That's a start. But fairness argues for full repeal.

Encourage association health plans. Such health-insurance purchasing pools, which allow small companies to band together to bring down premium costs, are blocked by state insurance regulations from operating on a national scale. Lifting the ban would give small-business associations new bargaining power--and provide new options for entrepreneurs struggling with double-digit premium hikes.

Offer health-care tax credits. Entrepreneurs need incentives to provide costly health plans. One way to start would be to adopt Al Gore's tax credit for 25% of the premium costs of each employee insured. Meanwhile, workers who buy their own coverage should get to deduct the costs.

As for the prospects, it's easy to be pessimistic. But with two years of gridlock looming, moderate legislators may wind up ruling with a common-sense agenda--proving that, indeed, a divided government is the best government of all.